FARMING

I have a small maize farm. How do I start a seasonal basic set of books of accounts to enable me to determine whether I make a profit or loss?

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Hi Grace!

What you need to do is start using a Cash Receipts Journal to record all of your money earned from your farm, and a Cash Disbursements Journal to record all your expenses of running your farm.

I have more info on these 2 journals on my Basic Accounting page - you can access this page from my navigation bar to the left - just click on Basic Accounting and then scroll down to the page links for Cash Receipts Journal and Cash Disbursements Journal.

Those pages should give you more info on setting up a system to capture all your expenses and revenue. From there, you can calculate profit or loss. To do that, subtract all your expenses from your revenue. If the amount is positive (revenue > expenses), you have a profit. If the amount is negative (expenses > revenue) you have a loss.

Hope that helps.

Please keep coming back for more help with basic accounting principles here on my site, and good luck with your farm!

tip: you may want to sign up for my e-newsletter, too. It's on the navigation bar to the left.